June 1 (Bloomberg) -- European stocks fell to a five-month
low as reports showed U.S. payrolls increased at the slowest
pace in a year and the unemployment rate unexpectedly rose,
adding to weakening economic data from China and the euro area.

Daimler AG and Bayerische Motoren Werke AG fell more than
3.5 percent, leading automakers lower. BP Plc gained 1.8 percent
after it said it will pursue the sale of its 50 percent holding
in TNK-BP, Russia’s third-largest oil producer.

The Stoxx Europe 600 Index declined 1.9 percent to 235.09
at the close of trading in London, completing a weekly loss of
3.1 percent. The benchmark measure slumped 6.8 percent in May as
concern mounted that Greece will leave the euro area and Spain’s
borrowing costs increased.

“It’s not a good day for the bulls,” said Philippe
Gijsels, a market research analyst at BNP Paribas Fortis Capital
Markets in Brussels. “The slowdown is global. We are seeing it
everywhere from Europe to China and now in the U.S. that had
seemed a little bit immune so far. Risky assets are coming down
and safe havens are doing even better.”

U.S. payrolls climbed by 69,000 last month, less than the
most-pessimistic forecast in a Bloomberg News survey, after a
revised 77,000 gain in April that was smaller than initially
estimated, Labor Department figures showed. The median estimate
called for a 150,000 May advance. The jobless rate rose to 8.2
percent from 8.1 percent, while hours worked declined.

Euro Area, China

Euro-area unemployment reached the highest on record as a
deepening economic slump and budget cuts prompted companies from
Spain to Italy to cut jobs.

The jobless rate was at 11 percent in April and March, the
European Union’s statistics office said. That’s the highest
since the data series started in 1995 and in line with the
median forecast in a Bloomberg survey. The March figure was
revised up to 11 percent from 10.9 percent.

China’s Purchasing Managers’ Index fell to 50.4 in May from
53.3 in April, the nation’s statistics bureau and logistics
federation said. That compared with the 52 median estimate in a
Bloomberg News survey of economists. A reading above 50
indicates expansion. A separate gauge from HSBC Holdings Plc and
Markit Economics showed a seventh straight contraction, the
longest since the global financial crisis.

In The U.S. the Institute for Supply Management’s factory
index fell to 53.5 in May from 54.8 a month earlier, the Tempe,
Arizona-based group’s report showed today. The median forecast
of economists surveyed by Bloomberg News called for a drop to
53.8.

Greek Elections

In Greece, two opinion polls published today showed the New
Democracy party, which backs austerity measures, leading left-wing group Syriza, which opposes them. Two other polls showed
Syriza in the lead before the June 17 elections.

A report showed U.K. manufacturing shrank last month at the
fastest pace since the depths of the financial crisis in 2009. A
gauge of factory output dropped to 45.9 from 50.2 in April,
Markit Economics said.

Preferred shares of Volkswagen AG dropped 4.1 percent to
123.75 euros, its third day of declines. Daimler and BMW fell
5.1 percent to 35.52 euros and 3.9 percent to 58.72 euros,
respectively. A gauge of automakers was the worst performer of
the 19 industry groups on Stoxx 600.

Anheuser-Busch InBev NV, the world’s biggest brewer, fell
3.2 percent to 53 euros after the Brazilian government raised
beer taxes more than anticipated.

AB InBev owns Cia. de Bebidas das Americas, Brazil’s
biggest brewer and gets about 30 percent of its earnings before
interest and taxes from the country.

Swiss Watchmakers

Swatch Group AG and Cie. Financiere Richemont SA fell 4.7
percent to 355.90 francs and 6.1 percent to 52 francs as China’s
manufacturing slowdown raised concerns that demand for Swiss
watches will decline in the country.

Eurocommercial Properties NV, the Dutch owner of shopping
centers in France and Italy, fell 4.1 percent to 25.37 euros.
JPMorgan Chase & Co. downgraded its recommendation on the stock
to neutral, the equivalent of hold, from overweight.

Tenaris SA, the world’s largest maker of seamless steel
pipes, slid 5.4 percent to 12.19 euros, its lowest in six
months. The stock was cut to underperform from neutral at Credit
Suisse Group AG.

BP gained 1.8 percent to 402 pence. The company said it had
notified its partners in TNK-BP of its intention to look at a
sale of its stake. There can be no guarantee that any
transaction will take place, BP said.

HMV rallied 17 percent to 3.99 pence after it agreed to
sell London concert venue Hammersmith Apollo Ltd. to Stage C
Ltd. for 32 million pounds ($49 million) in cash.